Pulse2014 1068

© 2013 IBM Corporation

Asset Management Best Practices: Leveraging PAS 55 as the worldwide standard for asset management using IBM’s Maximo Asset Management

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Agenda

Introduction – Asset Management PAS 55 – What is it ? Scope and coverage PAS 55 and IBM Maximo Asset Management Value Drivers Summary


Reminder: What is Asset Management?

PAS 55 defines Asset Management as: systematic and coordinated activities and practices through which an

organization optimally and sustainably manages its assets and asset systems, their associated performance, risks and expenditures over their life cycles for the purpose of achieving its organizational strategic plan

The organizational strategic plan is defined as: overall long-term plan for an organization that is derived from, and

embodies, its vision, mission, values, business policies, stakeholder requirements, objectives and the management of its risks

Extracted from Publicly Available Specification (PAS) PAS 55-1:2008, BSI September 2008


PAS 55 – What is it ?

• The Institute of Asset Management and the British Standards Institute (BSI) worked together to develop strategies to help reduce risks to business-critical assets. This project resulted in the Publicly Available Specification (PAS) 55, first published in 2004. •. This specification (standard) is the culmination of the latest thinking in terms of best practices in asset management systems. • Assets include plant, machinery, property, buildings, vehicles, construction, etc. that have a distinct and quantifiable business function or service


PAS 55 is relevant to all Asset Classes across Industry

Facilities, Buildings, Warehouses, Hospitals

Oil, Gas, Chemicals, Pharmaceuticals, Food, Electronics, Power Generation, Manufacturing

Defense, Airlines, Rail, Road, Automotive

Railways, Electric / Gas Distribution, Highways, Telecom, Water

Computers, Routers, Networks, Software, Auto Discovery, Service desk

Plant & Production

Real Estate & Facilities

Transportation and Fleet

Infrastructure and Network

IT Equipment

Manage Assets

Manage Asset Systems

Manage asset portfolio

Create/ acquire

Utilize

Maintain

Renew/ dispose

Capital Investments Optimization and sustainability planning

Sustained performance Cost & Risk optimization

Optimize life cycle activities

Organizational Strategic Goals

PAS 55 Asset Management System

Organization Management


PAS 55 scope and coverage

Important interface: motivation, communication,

roles & responsibilities, knowledge, experience, leadership, teamwork

Important interface: reputation, image,

morale, constraints, social impact

Important interface: life cycle costs, capital investment criteria,

operating costs

Important interface: data on condition,

performance, activities, costs & opportunities

Vital context: Stakeholder needs, business objectives, policies, regulatory

environment, performance goals, risk management

Physical Assets Financial

Assets

Human Assets

Information Assets

Intangible Assets


PAS55:2008 Management System Structure: measurable continual improvement is an integral part

BSI - 2008

4.5 Implementation of Asset management plans 4.5.1 Life cycle activities 4.5.2 Tools, facilities and equipment

4.3 Asset management strategy, objectives and plans 4.3.1 AM management strategy 4.3.2 AM objectives 4.3.3 AM plans 4.3.4 Contingency planning

Act

Do Check

4.1 General requirements

PAS 55:2008 management

system structure

4.6 Performance assessment and improvement 4.6.1 Performance and condition monitoring 4.6.2 Investigation of asset-related Failures, incidents and non-conformities 4.6.3 Evaluation of compliance 4.6.4 Audit 4.6.5 Improvement actions 4.6.6 Records

4.7 Management review 4.2 Asset management policy Plan

4.4. Asset management enablers and controls 4.4.1 Structure, authority and responsibilities 4.4.2 Outsourcing of AM activities 4.4.3 Training, awareness and competence 4.4.4 Communication, participation, and consultation 4.4.5 AM system documentation 4.4.6 Information management 4.4.7 Risk Management 4.4.8 Legal and other requirements 4.4.9 Management of change


Benefits of optimized life cycle asset management:

evidence, in the form of controlled and systematic processes, to demonstrate legal, regulatory and statutory compliance;

improved health, safety and environmental performance;

improved risk management and corporate governance and a clear audit trail for the appropriateness of decisions taken and their associated risks;

improved corporate reputation - enhanced shareholder value, improved marketability of product/service, greater staff satisfaction and more efficient and effective procurement from the supply chain;

enhanced customer satisfaction from improved performance and control of product or service delivery to the required standards;

long-term planning, confidence and performance sustainability;

the ability to demonstrate best value-for-money within a constrained funding regime;

optimized return on investment and/or growth;

Holistic Systematic

Optimal

Sustainable Integral

Risk-Based

Organizational Commitment &

Culture

The dimensions of successful Asset management based on PAS 55


Deployment of the PAS 55 standard encourages to:

Achieve asset management good practices Challenge and reduce current

time-based work and replace with a “risk-based” management approach Organize around true lifecycle

asset management processes Start processes to map the

entire asset base and create the information strategy in accordance with the company’s overall strategy

Position asset management-specific accountability from the “shop floor to the top floor” and create motivational performance management Focus on building the asset

management knowledge base. Understand and target the

tools, and engage the entire organization Adopt a truly holistic

approach by continuously challenging good or best practices.


PAS 55 What does it require for compliance ?

An Asset Management System that meets a framework of requirements to display Asset Management competence.

Requirements are for ‘good’, rather than ‘best’ practice in each area plus evidence of processes and KPI’s for Continuous Improvement.

Specifies WHAT needs to be done, not “how”

All elements of the framework need to be covered. Excellence in one area doesn’t make up for a gap elsewhere. (this is an integration requirement)

Appropriateness, coverage & connectivity of the Asset Management system is what matters. Processes must be effective.

Requires evidence of what is being done and why. How is up to the organization. (Non Prescriptive - like ISO 9000/14000/18000)

PAS 55 is independent of industry sector, asset type, asset distribution & asset ownership structure.


Organize around true Life Cycle Asset Management processes, commitment and expenditure trends Challenge and reduce time-based work - Replace with a Condition, Value

and Risk- based approach Place AM specific accountability from shop floor to top floor and create

“motivational performance management indicators” aside KPI’s Adopt a truly Holistic Approach - continuously challenge practices and

continuously improve

Get understanding where you are now relative to World Class performance Map the Asset Base and create the Information Strategy you need Build the Asset Management knowledge base – understand and target the

tools and engage the whole organisation (holistic approach)

PAS 55: What are the main messages?

…and why adopt anyway?


Maximo Asset Management leverages PAS 55

Enables a natural alignment with PAS 55.. Using IBM Maximo Asset Management software supporting PAS 55 can help to:

– improve customer service, increase return on assets, enable greater compliance, improve asset performance, reduce risk—all in a shorter time period, provide better visibility and control of all required information to better align with the organization’s overall business goals and objectives.

Supports full Maintenance Management requirements. This is optimized at process level.

Examples are reactive, preventive and planned maintenance combining materials and service management.

Supports Asset Risk Management. This is optimized at asset performance level.

Examples are asset reliability, service and performance management. Maximo Key Performance Indicators (KPIs) and metrics as Mean Time To Repair (MTTR), Mean Time Between Failure (MTBF) addresses such requirements.

Supports Infrastructure Management - This is optimized at service performance level. Examples are utilities and facilities management. Maximo's spatial and linear asset management, facilities and integrated workplace management capabilities (based on integration with Tririga’s IWMS).

Supports IT Asset Management - which is important managing today's complex assets and to integrate requirements from shop floor to the corporate office.

MAXIMO ASSET

MANAGEMENT


PAS 55:2008 Positioning with Maximo Asset Management PAS 55 4.1 : General Requirements

IBM’s Maximo Asset Management software solution is widely viewed as the EAM market leader*) and provides the following capabilities:

- A single version of the truth for all asset-related information - Support for all asset classes or asset types such as production assets, fleet or mobile assets, facility assets, as well as IT or IT-enabled assets - A place to define performance criteria and associated key performance indicator (KPI) measures - Identification of performance failure - Tracking and management of incidents, problems and change - Support for corrective and preventive action - Ability of the Maximo Asset Management workflow engine to model and monitor processes and procedures provides a communication mechanism for the user community and a secure data repository for all asset-related information.

*) Source: Gartner Magic Quadrant 2011

MAXIMO ASSET

MANAGEMENT


Maximo Helps Manage to Policy

PAS 55 4.2 : Asset Management Policy Through the ability to configure and re-configure key business processes as part of Maximo’s capabilities, users at all levels are able to achieve alignment with the company’s overall objectives and objectives and behavior for asset management in general or more specifically for activities as capital investments, operations, maintenance and contracting. Health, safety and environmental issues (HS&E) provide a good example. - For instance, the primary objective of HS&E) initiatives is to reduce overall risk, comply with governmental regulations and create a safe, yet efficient operating environment. Achieving this objective is as much about standardizing HS&E practices as integrating these practices with day-to-day operations management. Maximo Asset Management provides a foundational enterprise platform that integrates all health, safety, and environment (including security) processes with work and asset management data and processes to provide a single view of your personnel, facilities, assets and operations.


Maximo Enables Strategy, Objectives and Plans

PAS 55 4.3 : Asset management Strategy, Objectives and Plans A key requirement of a solid EAM system as Maximo Asset Management is to be able to integrate efficiently with a range of other systems, to have at any time only “one version of the truth” in relation to asset information. The capability to integrate with other external systems, through the IBM Maximo Enterprise Adapter or IBM WebSphere® software, and IBM service-oriented architecture (IBM SMART SOA®) components, provides a standards-based approach to systems integration. Maximo’s Asset Management functionality, including its ability to configure key processes to specific requirements, while maintaining visibility and consistency throughout the system, provides good support to meet the overall requirements of the system and to document a long-term asset management strategy and related objectives and plans.


Maximo Provides a Platform

PAS 55 4.4 : Asset Management Enablers and Controls Maximo Asset Management provides full support to many of the functions noted in this section of the standard, including procedures and functionality for: - planning , scheduling and resource allocation, asset configuration, calibration and maintenance, spare parts maintenance, inspection and testing of systems and equipment, management of change with risk mitigation and availability of standard or user-defined key performance indicators (KPIs) combined with management dashboard capabilities based on roles. Maximo Asset Management provides full capabilities to support all types of outsourcing requirements, including service desk, service request tracking, and service-level agreement management with contracting and billing. Maximo Asset Management provides capabilities for organizational learning supported by solutions and lessons learned from applications to better manage labor skills and resource provisioning Maximo’s risk assessment capabilities are designed as an iterative process that links all associated HS&E activities and organizational data. Maximo risk assessment capabilities provide a comprehensive solution for managing risk and improving safety, reliability and compliance.


Maximo Drives Compliance PAS 55 4.5 : Implementation of Asset Management Plan(s) The organization should establish and maintain arrangements to ensure the effective control of activities required to fulfill the asset management policy, strategy, objectives and plans

IBM has developed an implementation methodology to ensure support of all objectives for a successful implementation of the asset management solution to matches with: - the overall objectives as outlined in the PAS 55 standard requirements - overall business goals and objectives of the organization.


Maximo Enables Full Lifecycle Management PAS 55 4.6 : Performance Assessment and Improvement

Maximo provide full support to track, monitor and manage asset condition and performance

- Corrective Action Programs, CAPA - Identification of performance failure (as in ISO 14224 - Incidents and Change Management

Maximo supports concepts of “leading” indicators - where potential problems can be identified before occurrence

and “lagging” indicators, - where analysis of past failures can indicate a decreasing performance trend Maximo manages incident, problem, change management, to support

- Identification of incidents - allocation of problems for investigations - management of changes to assets or procedures.

MAXIMO ASSET

MANAGEMENT


Basic Components of Maximo

Addresses business challenges of, Operations, Facilities and IT

Consolidates point solutions for Asset and Service Management into a logical suite of applications including: Work, Assets, Tools, Equipment, Facilities, Calibration, Linear, Spatial, Mobile and IT

Addresses business challenges of asset-intensive industries as in:

– Manufacturing, Energy & Utilities, Oil & Gas – Infra-structure/Construction, Transportation

Provides asset and service management support for: – Asset owners/operators – 3rd Party Maintenance Service Providers – Facilities management

Includes enhanced Workflow – Event Driven – Context-based – Escalation Manager

Integrates with Financial Systems (e.g. SAP) as well as Business Intelligence (Cognos), Business Analytics (SPSS), Document Management Systems

Compliance with: ISO, ISA, ROHS, IEEE, OSHA, FDA, EMEA, etc

Standards Based - ITIL KPI, Reporting and Analysis Tools SOA technology framework compliant Long history in the industry

MAXIMO ASSET

MANAGEMENT


Value drivers for improved asset management

Reduced Equipment Investment

Reduced Facilities Investment




Effective Service

Delivery / Profits

Generated

Capital Efficiently Employed

ROIC and Shareholder

Value / Qualitative

Benefits

Operating Costs Reduce Material Costs Reduce Material Costs Reduce Material Costs Reduce Material Costs

Reduce Service Costs Reduce Service Costs Reduce Service Costs Reduce Service Costs

Increase Labour Productivity




Increased Customer Satisfaction

More Competitive More Competitive More Competitive Improved Safety/ lower risk

Enhanced Regulatory & OEM Relationships Enhanced Regulatory & OEM Relationships Enhanced Regulatory & OEM Relationships Enhanced Regulatory & OEM Relationships

Increased Account Penetration



Increased asset availability /service reliability

Fixed Capital

Working Capital

Increased Inventory & AR Turnover




Revenue / Capability

Value Drivers

Increased asset availability and greater in-service reliability to provide a basis to improve service delivery/ grow more revenue from the same asset base

More timely and precise interventions improves productivity and reduces material use and in turn overheads

Increased asset lives and less downtime enables higher utilization and requires less investment in facilities/assets

OBJECTIVE Commercial - Maximize share holder value Public Sector - Effective service delivery

To realize these benefits it requires developing appropriate strategies and practical implementation approaches


Achieving benefits requires a structured, repeatable process

Identify Benefit Opportunities

Establish Business / Benefits Case

Secure Benefits Ownership

Develop and Track Benefits Measures

Develop BR Action Plan

Execute Benefits realization Action Plan

Realize Results

Identify Value Review strategic priorities Analyze performance Evaluate opportunities Develop value proposition

Drive and Realize Value Establish performance targets accountability Drive value delivery actions Manage performance delivery Leverage successes

IBM Industrial Products – Metals & Mining 22


What are the future challenges facing Asset Managers?

Post M & A synergies

Outsourcing / new business

models Poor reliability and utilization

Overhead costs/ Credit crunch

Globalization

Environmental/ green agenda

Capital constraints

Ageing and under

performing assets

Security, safety, compliance pressures

Ageing workforce

Competitive environment

Source: IBM Research 2009

Holistic Systematic

Optimal

Sustainable Integral

Risk-Based

Organizational Commitment &

Culture


Asset Management and PAS 55 in the Future

Companies recognize Asset Management as a Value Added Factor,

– 30 to 50% Cost Reductions – Doubling of Equipment Capability and OEE – Delivery of stable base to enable Lean Manufacturing Principles – Assured Environmental, Regulatory and Legal Compliance – Improved Image and relationships with Customers, Insurers,

Regulators and other Stakeholders

PAS 55 – Companies will realize the benefits of the PAS 55 life-cycle approach – Drivers coming from Complexity, Regulatory, Financial, Insurance, Image – Increasing interest from Regulators: E&U, Water, Pharma, Food, Nuclear,

Transportation, etc – Sector-specific aplication guideline projects (e.g. for property involving RIBA,

BIFM, OGC + Industrial sponsors

PAS 55 is a useful element of an Integrated Asset

Management Strategy to help meet these challenges


Questions?

Mary T Bunzel Worldwide Industry Leader Manufacturing Phone: +1 414 526 2015 Email: [email protected]

Thank you!

© 2009 IBM Corporation 26 © 2013 IBM Corporation

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